Noy Fund, TSK take Negev solar power plant stake

Shikun & Binui will continue to hold 50% of the Ashalim concession as bankrupt Spanish company Abengoa drops out.

Shikun & Binui Holdings Ltd. (TASE: SKBN) has signed an agreement for the Noy Fund and TSK Group to replace bankrupt Spanish company Abengoa for the building of the NIS 4 billion Ashalim thermo-solar power plant in southern Israel. Shikun & Binui will continue to hold 50% of the concession, while the Noy Fund will hold 40% and TSK Group 10%. TSK Group will also hold 32.5% of the project's building contractor. TSK is a global group with significant experience in the building and operation of large engineering and infrastructure projects, and is a world leader in the field of thermo-solar energy installations. Based on the agreement, Shikun & Binui's holdings in the building project will increase to 67.5%.

Both the Noy Fund and the TSK Group will assume, each according to its relative holding, all of the rights and responsibilities previously borne by Abengoa, which will continue to serve as one of the project's sub-contractors in a limited capacity.

Completion of the deal is contingent upon receipt of the required approvals from the Israeli government and financing entities. The project will continue to move ahead in line with its original timetable with completion expected in 2018, as initially planned.

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The project has been financed by a consortium of Israeli and international banks, including the American Overseas Private Investment Corporation (OPIC), the European Investment Bank (EIB), Bank Leumi (TASE: LUMI) and Bank Hapoalim (TASE: POLI).

The cost of the Ashalim Power Station will be approximately $1.1 billion and the plant will have a generating capacity of 110 MW, making it one of the largest thermo-solar power plants worldwide. All of the electricity will be sold to Israel Electric Corporation (IEC) (TASE: ELEC.B22) under a 25-year agreement that begins as soon as the plant becomes operational.

The plant will base its power generation on thermo-solar technology, a process through which the sun's rays are concentrated to create large quantities of thermal energy (heat), which in turn power turbines which generate electricity. The plant will employ some of the world's most advanced technologies, including an energy storage facility that will enable electricity production to continue uninterrupted even during cloudy days and at night.

In addition to increasing the quantity of power generated from a clean and renewable source, the project will make a significant positive economic impact on Israel's Negev region. During the construction phase, the project will employ hundreds of engineers, technicians, construction workers and service providers. During the plant's 25-year operational phase, the facility will provide direct employment for tens of team workers as well as indirect support for tens of local suppliers and service providers.